South Korea does not stack up against the United States and China in terms of the number of unicorn companies, which refer to unlisted startups valued at over US$1 billion. The United States and China have 201 and 101 unicorns, respectively, while Korea has only nine.
The United States and China has more than 80 percent of the world's unicorn companies, said a report on unicorn companies published on Nov. 5 by the KDB Future Strategy Research Institute under the Korea Development Bank (KDB).
The report said, based on data from market researcher CB Insight, that as of Oct. 25, the world had a total of 411 unicorn companies, including 201 in the United States and 101 in China. Korea stood sixth with nine unicorns. There were 21 unicorn companies in the United Kingdom, 19 in India and 11 in Germany.
In terms of corporate value, no Korean company broke into the top 10. China's AI company Bytedance took first place, followed by Chinese car sharing service Didi Chuxing and the United States’ Juul Labs. In 2014, two Korean companies, Coupang and Yellow Mobile, became unicorn companies. The number grew to four in 2017, eight last year and nine this year. The nine include WeMakePrice, L&P Cosmetics, Krafton, GP Club, Viva Republica, Woowa Bros. and Yanolja.
“Foreign unicorn companies are showing tremendous growth in such areas as sharing economies, cloud computing, and artificial intelligence, while Korean unicorn companies invest mainly in independent business models such as cosmetics and games that are not subject to regulations and face less conflict with interest groups,” the report pointed out. “Problems facing Korean unicorn companies are excessive regulations, conflicts among interest groups and unbalanced financial support. These problems need solving.”
In addition, the report noted that the Korean government’s and private investments are focused on startups. It said investments need to be made to expand markets for startups and help them go global in order to energize unicorn companies and further nurture decacorn companies. “Startups need to learn the ‘copytiger’ strategies of Didi Chuxing in China and Grab in Singapore, both of which surpassed Uber in corporate value,” the report said.